A -- Is a copyright levy system, that -- taking as a basis the estimation of the actual damage -- is financed through the State budget thus not making possible to guarantee that the costs of this compensation are only supported by the users of the private copies (as opposed to the non-users), compliant with Article 5(2)(b)b) of [EU] Directive 2001/29?

B -- If the answer is in the affirmative, is it compliant with Article 5(2)(b) of Directive 2001/29 that the total quantity set aside by the government for this compensation, which is calculated in view of the estimation of the actual damage, is set within [or conditioned by] the budget restrictions for each financial year?

So it looks like we will get another copyright judgment from the EUCJ, which has been increasinglycalledupon to give definitive rulings in this area. The IPKat notes that until the EUCJ decision is handed down, all of Spain's new copyright law may be put on hold -- no bad thing considering how awful much of it is.

from the this-again? dept

French politicians had been pushing for years to extend its infamous "you must be a pirate" copyright levy (tax) to tablets, and it appears that's now in place. Apple has been ordered to pay €5 million for all the copying supposedly going on via tablets. Apple pushed back, pointing out that there wasn't any actual evidence to support the premise that the iPad was used for copying music, but the court basically said "too bad" and "here, pay €5 million while we figure out the amount you'll actually owe:"

Apple argued as follows: the decision was not based on any hard data flowing from a study of actual use and merely replicated a previous decision applicable to mobile telephones, which decision was quashed for failing to properly carve out professional use....

[....] However, Copie France sought an award of a provisional amount, relying not on decision #13 but rather on the general statutory principle that such compensation is due. The Court agreed with this line of reasoning, noting that such principle was enshrined in both domestic and European law. It further noted that Apple, as supplier of the equipment at issue, was indeed the party that owed the levy. The Court thus fixed the amount of the provision at €5,000,000, to be applied against the final sum to be determined for the period between February and December 2011 (and ordered that its judgment be enforceable notwithstanding any appeal).

And, yes, technically, this tax is not supposed to be on "piracy" but on "legal copies" made, but everyone knows that argument is a smokescreen. The whole point of levies has really been to try to compensate copyright owners for copies they can't directly tax. And, while Apple will have to pay up here, you can bet this will end up coming out of consumers pockets, as always happens with copyright levies, which serve to (1) make innovative technologies more expensive and (2) build a giant bureaucracy where not much money ever actually goes back to artists.

from the artists-who-get-that-the-internet-isn't-evil dept

in 2007, the Songwriters Association of Canada gained some international headlines with a proposal to legalize non-commercial peer-to-peer file sharing through an ISP levy. This sort of proposal wasn't new, but had not been so prominently put forth by an artist organization before. There were serious problems with the proposal, but it stimulated a healthy debate and it started from many correct premises -- that file sharing should be embraced, that digital locks and lawsuits were not a way forward, etc. But it was a non-voluntary, "you're a criminal" tax that could open the floodgates for other industries to demand similar levies.

I was a member of the Songwriters Association of Canada from 2007-2011, and I had the opportunity to express my concerns about the proposal to many people involved. Last year, I attended a session with an update on the proposal, and was surprised how much it had changed. The proposal had dropped the legislative angle in favor of a business to business approach, with an actual opt-out option for both creators and customers of participating ISPs. Unlike groups behind other licensing proposals, the SAC has actually been responsive to many concerns, and unlike other artist groups, the SAC takes a decidedly positive view on sharing music and the opportunities technology provides to creators. This attitude comes through in the proposal:

Rather than a legislative approach to the monetization of music file-sharing as we originally envisioned, the S.A.C. is now focused on a “business to business” model that requires no new legislation be enacted in Canada.

Our basic belief however remains the same: Music file-sharing is a vibrant, open, global distribution system for music of all kinds, and presents a tremendous opportunity to both creators and rights-holders. [...]

People have always shared music and always will. The music we share defines who we are, and who our friends and peers are. The importance of music in the fabric of our own culture, as well as those around the world, is inextricably bound to the experience of sharing. [emphasis changed]

We think the practice [of file-sharing] is great and unstoppable. This is why we want to establish a regime that allows everyone to keep on doing it without stigmatizing the public and, instead, find a way for artists and rights holders to be fairly compensated for the music files that are being shared. [...]

Other positive aspects include being able to find music that is not available in the commercial realm offer, finding a higher quality of digital files, being able to afford music even if you are poor and being able to discover new artists or recommend them to friends. [...]

Music is much better off with the Web. The internet network allows for musical discovery despite distance and time of the day. It has sparked collaborations between musicians unimaginable before. It has helped artists to book international tours without expensive long-distances charges and postal delays we knew before. [emphasis added]

However, significant problems remain with the proposal. For example, the original criticism still stands as to how this would scale for other industries -- what about book publishers, newspapers, movie studies, video game manufacturers and other industries that are also crying foul about "piracy"? The SAC dismisses other cultural industries pretty quickly, as if only the music industry is concerned about unauthorized copying. And, just like private copying levies have suffered from scope creep, as people no longer buy blank audio cassettes or CDs, or short-sightedness, as technology changes rapidly, it's not clear how the SAC model would adapt to growing wireless and mobile computing or more distributed file sharing. Many more questions remain: Would small, independent artists, who are not charting through traditional means, get fair treatment? Is it wise to largely rely on a single, proprietary vendor, Big Champagne, for tracking all distribution? Would consumers be paying multiple times for music? What does it mean to "self-declare not to music file-share" in order to opt-out?

But the central problem with the proposal is the SAC's copyright crutch. Jean-Robert Bisaillon says things like,

The Internet has dramatically increased the private non-commercial sharing of music, which we support. All that is missing a means to compensate music creators for this massive use of their work. [emphasis added]

And the proposal says things like,

Once a fair and reasonable monetization system is in place, all stakeholders including consumers and Internet service providers will benefit substantially. [emphasis added]

The SAC seems obsessed with a "monetization system," when the truth is there is no one model, no magic bullet. Rather, the the sky is rising and the path to success involves all sorts of different models and creative approaches, most of which don't depend on copyright or worrying about getting paid for every use. Even a voluntary license plan is still a badidea. The means to compensate music creators isn't missing, it's just increasingly found outside of copyright.

Still, it's important for the SAC's voice to be heard as the copyright debate heats up again in Canada. As a creator group offering a positive take on peer-to-peer file sharing, and denouncing an "adversarial relationship" between creators and fans, they offer an important counterpoint to the SOPA-style provisions being pushed by Canadian record industry groups. I would take the SAC's constructive and responsive approach over record industry astroturfing and fear mongering any day.

from the math-and-moore's-law dept

For years, we've discussed the various attempts up in Canada for the CPCC -- the Canadian Private Copying Collective -- to put its "you must be a criminal" tax on the iPod and on your ISP. Both efforts have failed, and now it appears they're just trying totally random stuff just for the hell of it. Howard Knopf explains that the CPCC's latest proposal includes a tax on memory cards:

50¢ for each electronic memory card with 1 gigabyte of
memory or less, $1.00 for each electronic memory card with
more than one gigabyte of memory but less than 8 gigabytes of
memory, and $3.00 for each electronic memory card with
8 gigabytes of memory or more.

What does this have to do with music? No one seems to know. The CPCC seems to be arguing that such cards are regularly used for making copies of music, but that's ridiculous. Perhaps some are using memory cards for such things, but it seems unlikely that it's a large percentage of such cards. They're regularly used in digital cameras and phones, but those have little to do with music most of the time.

The rates are also flat out ridiculous. We've already discussed how the levy in Canada represents around 90% of the cost of a CD-R in some cases. While this isn't quite that bad, it's starting out high, and the rates are static so it's only going to get worse. As Michael Geist explains:

The financial impact of the levy would be significant. A 2GB SD card currently sells for about $6.00 and this would add an additional dollar or almost 15% to the cost. Given that the levy would remain static (or even increase) but the costs of SD cards are dropping by roughly 30% annually, the percentage of levy in the overall cost would likely gradually increase over time. Moreover, music plays a small role in the use of memory cards. A recent report indicates that digital cameras are the primary market for SD cards with smartphones the second biggest (and fastest growing) market. Music is a small part of the equation, yet the CPCC is demanding payment for every memory card sold in Canada regardless of its intended or actual use.

Another way to put it in perspective is via Knopf's original post, in which he notes that this is actually the second time the CPCC has tried this, and the last time around they wanted $0.008 per megabyte, and he does the math on that:

On today's typical 16 GB card that sells for about $30 or less, that would be a "tax" of $128 -- or about 400% -- which shows the CPCC's foresight and the application of Moore's Law.

It's really quite astounding how little the legacy recording industry seems to understand technology and the advance of progress at times. A tax like this is massively damaging to their own interests in the long run, but they just don't seem to recognize it. In the meantime, as ridiculous as this is, Knopf notes that it still means there's going to be a lot of wasted money fighting over this:

Unfortunately, the way the Copyright Board works, it seems inevitable that one or more parties are going to have to spend a lot of money to convince the Board not to impose this levy -- or "tax" as most will call it. The CPCC will spend a lot of money -- which it has from undistributed levies -- to line up its usual expensive experts to provide evidence of its entitlement to this "tax". One or more parties will have to provide evidence and experts at great expense to refute this -- even though it seems so obviously wrong. But that's the way the Copyright Board mechanism works in this and other instances where a collective is entitled to file a proposed tariff.

It's really quite stunning the sense of entitlement the industry feels here, that it can simply put a massive tax on a form of memory that is rarely used for music. Though, if it passes, and musicians really want to make some money, they might be better off getting jobs at Best Buy and pushing people to buy SD cards.

from the creative-destruction dept

While a variety of folks have, over the years, suggested some form of a "private copying levy" or "internet levy" to tax users and hand it over to folks in the entertainment industry to distribute, we've spent a lot of time explaining why this is a terrible idea. The key point that we've explained is that this creates a distorted market that actually harms new business models, by driving (by taxation) money from those models right back into the old industry types who refuse to innovate. Rick Falkvinge has now taken a stab at exploring the issue and appears to agree, noting that the whole thing is an attempt to keep the old structures of the industry in power, to block the new centers of power (which often come directly from the artists):

It is about a previous elite -- bordering on nobility -- which has lost its privileges, an elite which has been replaced by indie artists of all genres and new distribution methods, and where this elite is seeking to restore its former status of special by an ability to tax the public.

from the hurdles-remain dept

We've discussed some interesting things happening down in Brazil when it comes to copyright. First, we've looked a few times at how the super popular technobrega music industry has thrived by embracing giving away music and using that to build up fame and business models based on selling scarcities -- such as live shows. But, perhaps more interesting has been the ongoing proposals for new copyright laws in Brazil. For example, there was the decision to buck the trend in many places and not have a notice and takedown provision like the DMCA, but only have content get taken down with a court order -- a position that shows significantly more respect for free speech rights. Separately, one recently proposed draft amazingly included penalties for hindering fair use or the public domain.

It's almost as if folks in Brazil have actually noticed how poorly set up most of the rest of the world's copyright laws are.

Last month, Brazil allowed public comment submissions on copyright, and apparently at the last minute, a large group of artists groups and consumer rights groups put together a proposal to "end" the "war on copying" (found via IP Watch). Basically, the plan has a few parts, but the big one is the idea of legalizing non-commercial file sharing in exchange for a broadband levy of 3 Reais -- or about $1.74 US. That's certainly a hell of a lot cheaper than most proposals out there.

That said... while I appreciate getting rid of "the war on copying," I do think there are some serious problems with a proposal like this. Copyright levies tend to have serious unintended consequences. They create large bureaucracies, where money collection and distribution is not always done fairly. In fact, they often tend to favor bigger name artists over smaller artists, and just having the bureaucracy creates overhead that goes to the bureaucracy, rather than the artists. On top of that, it takes away incentive for consumers to support artists directly through other creative business models, because they feel that they "already paid," via the levy. So, as it stands, I don't think this is a great solution, but it's at least a hell of a lot better than copyright law most other places -- and it's great to see a focus on actually getting past the old "copy wars."

from the not-everyone-is-a-criminal dept

Up in Canada, it seems that there's a constant push to expand copyright levies (the "you must be a criminal tax") to nearly everything from iPods to ISPs, despite the fact that many people recognize what a joke the levies have become. After failing to get it expanded to cover iPods, supporters of the levy pushed for ISPs to have to pay the levy, because people using their internet connection might possibly access content. Thankfully, a Canadian appeals court pointed out that access to broadcasts of content is not the same thing as broadcasting it and rejected adding the "you must be a criminal" tax to internet access.

Of course, there is one rather interesting part of the ruling, which is that the court notes that one of the reasons for this ruling is that ISPs are effectively "content neutral." If they were to stop that (i.e., and break net neutrality concepts), they could open themselves up to having this tax come back:

In providing access to "broadcasting", ISPs do not transmit programs. As such, they are not "broadcasting" and therefore they do not come within the definition of "broadcasting undertaking". In so holding, I wish to reiterate as was done in CAIP that this conclusion is based on the content-neutral role of ISPs and would have to be reassessed if this role should change

This is notable because, as in the US, there has been talk among ISPs of breaking basic net neutrality concepts. Perhaps this ruling will get them to think twice.

from the doing-the-math dept

Last week, a few folks submitted the news that the Canadian Private Copying Collective, who collects a tax (levy) on every blank CD sold in Canada is now, once again, pushing for a tax on every iPod sold. They try to do this pretty much every year. A few years ago, Canadian courts struck down an attempt to do so. Then there was another try which, again, was struck down with the court pointing out that they'd covered this in the past.

But they're back at it again. And it's really no wonder. Already the cost of a blank CD in Canada has an astounding 90% of the price go to this levy. But what happens to all that money? Well, the CPCC claims that it needs this levy to sustain the livelihood of artists. That's also its reasoning for extending it to iPods. But, Howard Knopf dug into the numbers a bit and notes how laughable that claim is. First, CPCC claims that its brought in over $150 million from the blank CD levy, and handed it out to 97,000 rights holders "most of whom would not be able to continue their careers without this revenue."

That's quite a claim, isn't it? But if you just do the most basic division, you'll find that it makes no sense at all. At $150 million over ten years for 97,000 rights holders, you're talking about $160 per year on average. And, of course, the truth is that it's significantly less for most, and much bigger for a very small number. I think it's safe to conclude that "most" of the 97,000 rightsholders aren't relying on CPCC money for any kind of career. Oh, but you know who did get a lot of money to play with? CPCC. Knopf notes that:

About $22 million has gone to the costs of pursuing Copyright Board tariffs (lawyers, consultants, surveys, etc.), collection and enforcement (e.g. lawyers and auditors), and other causes such as "communications and government relations - $1,272,000." And that's only the end of 2007.

from the $2500-iPod dept

Howard Knopf, a well known Canadian copyright expert, recently took a look at some of the failed copyright levy proposals in Canada. The Canadian Private Copying Collective (CPCC) administers the tax levy on blank CDs, which now accounts for almost 90% of the price. In 2002, similar proposals to extend the levy to DVDs and digital audio players were shot down. It's a good thing they were! Knopf notes that the $2.27 levy proposed in 2002 is now about 10 times the retail price of a blank DVD, and the $21/GB levy proposed for digital audio players would have left a 120 GB iPod (<$300 CAD) with a $2520 tax. You might think the CPCC would have decreased the levies over time, but the blank CD levy was just increased this past December (blank CDs cost more in Canada than blank DVDs). Even if the levies were lowered, it would be because they had already become unbearable. Imagine the bureaucracy and battles at the Copyright Board, and imagine the effect on Canadian consumers, tech companies in the meantime (what if the Blackberry was classified as a digital audio device?).

The point is that these quick solutions aren't solutions at all. Setting up "you're a criminal" taxes to collect money for companies that can't figure out how to adjust their business models is bound to block innovative new technologies, and you can't predict what technologies will drive new business models. As Knopf puts it, "all of this shows that today's quickie proposed legislative solutions and oft inflated tariff proposals to deal with supposedly serious crises arising from copyright and new technology are potentially tomorrows' absurdities or even nightmares."

from the you're-a-criminal dept

The Copyright Board of Canada has decided to increase the levy on blank CDs from 21 cents to 29 cents each. The levy is a sort of "you're a criminal tax" that assumes blank CDs are going to be used for unauthorized copying. Blank CDs in Canada are now often more expensive than blank DVDs (which have no levy and hold more data), and most of that cost goes directly to the record industry. In 2006, about 70% went to the labels, but it seems like even more now, with actual price of CD-Rs dropping. With a 21 cent levy, a pack of 50 CD-Rs sells for about $12 before tax. That's 24 cents per CD-R -- 87.5% of the price goes to the record industry. And that's before the 8 cent increase.

The board notes that sales of blank CDs are declining, but justifies the increase by arguing that compression allows people to store more songs on a CD. Meanwhile, there's no levy on digital audio players (the Canadian record industry was worried it would legalize downloading and seemed to prefer to push for tougher copyright legislation instead). What's going to happen when the Copyright Board realizes that blank CD sales are likely declining, not because everyone is using compression, but because less people are using CDs? This "you're a criminal tax" has always been a short-term band-aid solution that's not going to fix the record industry's problem. Do Canadians really need to pay the record industry $30 million a year for the right to burn a few songs onto a CD every now and then? Luckily, the current government has expressed a desire to cancel the levy, though we'll have to wait and see if they can follow through.